FSD PHARMA, INC.
SECURITIES CLASS ACTION SETTLEMENT

ANNE MILLER V. FSD PHARMA, INC.
CV-19-614981-00CP

This claims administration website was updated on August 15, 2022

Dear Claimants,

Thank you for your patience as we progress through the claims administration. We apologize for the delay in making Pro Rata Distributions payments to Authorized Claimants.

The Motion to the Court seeking amendments to the Plan of Allocation and seeking authorization from the Court to make Distributions to Authorized Claimants has been filed. Unfortunately, we do not have a timeline for how long it will take for the Court to decide.

Please see the documents webpage at https://www.fsdsecuritiesclassaction.com/case-documents to review the Court approved Plan of Allocation and Settlement Agreement. The relevant sections of the Plan of Allocation are posted below.

This will result in more equitable Pro Rata Distribution payments to Authorized Claimants as follows:

Currently, if Distributions for Authorized Claims occurred pursuant to the Court approved Plan of Allocation:

  1. November Disclosure claimants will receive 100% of their Maximum Entitlement; and
  2. September Disclosure claimants will receive approximately 4.88% of their Maximum Entitlement.

The two disclosure periods were designed to reflect the increased litigation risk faced in addressing the knowledge requirement of a non-core disclosure document (such as the September Disclosure) and the economic reality that FSD could not pay the damages resulting from the earlier date (the September period).

The split between the September Disclosure and November Disclosure was thus meant to maximize recovery for those that Class Counsel considered to have the stronger claim (and for which leave was obtained), while providing recovery also for the still-meritorious original period.

Despite the real reasons for the bifurcated distribution, the payout process under the Claims Administration has now resulted in the need to re-balance the funds between the September and November Disclosure periods, namely, because of an unexpectedly high percentage of recovery in the November Disclosure period.

This would leave approximately $240,457.28 in overage from the November Disclosure. By allocating the overage from the November Disclosure to the September Disclosure, the Pro Rata Distribution for the September Disclosure Period Authorized Claimants will increase approximately 1.6350%, resulting in more equitable Distribution for Authorized Claims and without compromising the Pro Rata Distributions payments to the November Disclosure Authorized Claimants.

Pursuant to Trilogy’s recommendation to the Court, a term must be added in an Amended Plan of Allocation to allow for a transfer of the overage funds from the November Disclosure to the September Disclosure. A copy of the proposed Amended Plan of Allocation is also available on the documents webpage.

It is important that Class Members check, the website, www.fsdsecuritiesclassaction.com, or the pop-up message when you log into the portal to review the status of your Claim on a regular basis for updates in regard to the claims administration. 

In the meantime, please be well.

Paul Battaglia, President,
Trilogy Class Action Services,
117 Queen Street, P.O. Box 1000,
Niagara-on-the-Lake, ON, L0S1J0
Toll Free: (877) 400-1211

Court approved Plan of Allocation – relevant sections

“Compensation Fund (September Disclosure)” means the portion of the Compensation Fund to be distributed to Authorized Claimants in respect of their Maximum Entitlement (September Disclosure)”;

“Compensation Fund (November Disclosure)” means the portion of the Compensation Fund to be distributed to Authorized Claimants in respect of their Maximum Entitlement (November Disclosure)”;

“Qualified Shares (September Disclosure)” means Shares purchased or acquired on or after September 20, 2018, but before November 29, 2018, and held until after the close of trading on February 6, 2019, calculated using LIFO;

“Qualified Shares (November Disclosure)” means Shares purchased or acquired on or after November 29, 2018 and held until after the close of trading on February 6, 2019, calculated using LIFO;

CALCULATION OF THE DISTRIBUTION AND MAXIMUM ENTITLEMENT

  1. The Administrator will allocate 30% of the Compensation Fund to Authorized Claims in respect of Qualified Shares (September Disclosure) to create the Compensation Fund (September Disclosure). The Administrator will then allocate 70% of the Compensation Fund to Authorized Claims in respect of Qualified Shares (November Disclosure) to create the Compensation Fund (November Disclosure).
  2. The Administrator will allocate all the Authorized Claims into these two Categories (i.e., September Disclosure and November Disclosure) depending on when Authorized Claimants purchased Qualified Shares.
  3. Based upon each Authorized Claimant’s Maximum Entitlement within each Category, they will receive their pro rata distribution based on the Total Damages in each Category. This will be done first by dividing the Compensation Fund (September Disclosure) by the Total Damages (September Disclosure) to calculate a percentage recovery per dollar lost defined herein as the “Pro Rata Distribution (September Disclosure)”, and by dividing the Compensation Fund (November Disclosure) by the Total Damages (November Disclosure) to calculate a percentage recovery per dollar lost defined herein as the “Pro Rata Distribution (November Disclosure)”.
  4. The Administrator will then multiply the Pro Rata Distribution (September Disclosure) by each Authorized Claimant’s Maximum Entitlement (September Disclosure) to arrive at the Distribution (September Disclosure) to be paid to each Authorized Claimant in that Category, and multiply the Pro Rata Distribution (November Disclosure) by each Authorized Claimant’s Maximum Entitlement (November Disclosure) to arrive at the Distribution (November Disclosure) to be paid to each Authorized Claimant in that Category.
  5. If a Claimant in either Category purchased their Qualified Shares for a price that is below what the Claimant sold them for (if sold within ten trading after February 6, 2019), or is deemed to have sold them for (if held after the close of trading on February 6, 2019 and not sold within ten trading days thereafter), such a Claimant will not be entitled to compensation from the Compensation Fund.
  6. Maximum Entitlement (September Disclosure) and Maximum Entitlement (November Disclosure) shall be calculated as follows:
    1. For Qualified Shares disposed of on or before the 10th trading day after the public correction (released before market open on February 7, 2019), the difference between the price paid for each of those Qualified Shares (including any commissions paid in respect thereof) and the price received upon the disposition of those Qualified Shares (without deducting any commissions paid in respect of the disposition) on a LIFO basis;
    2. For Qualified Shares not disposed of after the 10th trading day after the public correction, an amount equal to the number of Qualified Shares disposed of by an Authorized Claimant, multiplied by the difference between the price paid for each of those Qualified Shares (including any commissions paid in respect thereof determined on a per security basis) and the ten-day volume-weighted average trading price for those Qualified Shares following the public correction.


How do I get more information?

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Please see the contact page of this website for contact information for Class Counsel.

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